Correlation Between CompuGroup Medical and Mizuho Financial
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Mizuho Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CompuGroup Medical and Mizuho Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical SE and Mizuho Financial Group, you can compare the effects of market volatilities on CompuGroup Medical and Mizuho Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CompuGroup Medical with a short position of Mizuho Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Mizuho Financial.
Diversification Opportunities for CompuGroup Medical and Mizuho Financial
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Mizuho is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Mizuho Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mizuho Financial and CompuGroup Medical is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CompuGroup Medical SE are associated (or correlated) with Mizuho Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mizuho Financial has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Mizuho Financial go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Mizuho Financial
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to under-perform the Mizuho Financial. In addition to that, CompuGroup Medical is 1.29 times more volatile than Mizuho Financial Group. It trades about -0.05 of its total potential returns per unit of risk. Mizuho Financial Group is currently generating about 0.09 per unit of volatility. If you would invest 214.00 in Mizuho Financial Group on September 3, 2024 and sell it today you would earn a total of 252.00 from holding Mizuho Financial Group or generate 117.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Mizuho Financial Group
Performance |
| Timeline |
| CompuGroup Medical |
| Mizuho Financial |
CompuGroup Medical and Mizuho Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Mizuho Financial
The main advantage of trading using opposite CompuGroup Medical and Mizuho Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Mizuho Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mizuho Financial will offset losses from the drop in Mizuho Financial's long position.| CompuGroup Medical vs. DOCDATA | CompuGroup Medical vs. DATAGROUP SE | CompuGroup Medical vs. AECOM TECHNOLOGY | CompuGroup Medical vs. Hyrican Informationssysteme Aktiengesellschaft |
| Mizuho Financial vs. MOLSON RS BEVERAGE | Mizuho Financial vs. Nomad Foods | Mizuho Financial vs. COFCO Joycome Foods | Mizuho Financial vs. National Beverage Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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